from International Franchise Association
President Matthew Shay
May 2, 2005
come to our attention that some IFA-member companies
may be providing information about franchising that
is long out of date and no longer presents an accurate
picture of the sector.
concern is information claiming that the success rate
of franchised establishments is much greater than
that of independent small businesses.
ago, the U.S. Department of Commerce conducted studies
about franchising which presented such statistics.
That information is no longer valid. The agency stopped
conducting such studies in 1987.
urge you to remove any information from your Web site
and published materials that make such a claim. The
use of such data, in the absence of current research,
could mislead prospective franchisees who are attempting
to conduct responsible investigations.
Franchise Association's Educational Foundation recently
released a study, The Economic Impact of Franchised
Businesses, conducted by PricewaterhouseCoopers, which
offers the first comprehensive view of franchising's
economic impact. This study, available at www.franchise.org,
contains information that could be helpful to prospective
franchisees and others in determining the size and
scope of franchising.
study available on the IFA Web site is The Profile
of Franchising, which collected data over three years
from UFOCs and offers data averages on such important
aspects of franchising as unit turnover, initial franchise
fees, initial investment levels, contract terms and
renewal, royalty and advertising fees. We recommend
that you review these two studies and share the information
in them instead of perpetuating outdated and potentially-misleading
As a member
of the franchising community, you serve as a gateway
to future generations of franchisees and entrepreneurs.
Please join IFA in making an effort to present an
accurate picture of franchising.
International Franchise Association